Property investment is appealing to many people as it doesn't require the same level of knowledge that investments such as shares do. However, if it's your first time investing in property, there are a few things you'll need to bear in mind.
1. Do your research into prime investment locations
Experienced investors understand the importance of location when selecting property. Here are things you should be looking for:
- Areas slated for growth: Investments in Inner West suburbs such as Ashfield, with high rates of annual growth, are more likely to see you benefit from capital gains.
- Planned developments and infrastructure projects: New developments such as commercial and retail centres, roads and other infrastructure are indications that demand for property will increase in years to come. The airport at Badgerys Creek and construction of the WestConnex will see surrounding Western Sydney suburbs grow significantly over the next decade.
- Low vacancy rates: You want demand to be high in the area you're buying, because if you can't find tenants for your property, you won't be paying off the mortgage very quickly. High occupancy rates indicate high demand.
- High rental yields: Buy in areas where rent is high but property values are relatively affordable to give you a higher return on your investment.
- Good schools and transport connections: Think about what would appeal to tenants. Location in a good school catchment area and proximity to public transport are big pluses that will increase demand for your property.
2. Budget carefully for investment property costs
It's important you calculate not only the upfront costs you'll be up for (e.g. the mortgage deposit, stamp duty, lenders' mortgage insurance, conveyancing, pest and building inspections, and so on) but also ongoing costs. These could include:
- Repairs and maintenance;
- Property management;
- Insurance; and
- Council and water rates.
Enlist the assistance of a financial planner or mortgage broker if you need it.
3. Choose a property developer with a proven track record
Many investment properties are purchased off-the-plan, which means you won't see the finished property until after you've paid the deposit. This is why it's so important to only buy from property developers that have a track record of completing their developments and who won't mess you around.
Crown Group is one of Australia's leading luxury property developers. Our developments all over Sydney set the benchmark for high-end living. We identify prime investment locations in growing suburbs of Sydney where demand is so high that our developments – most recently Waterfall in Waterloo – continue to smash sales records.
We provide a complete investment package that includes development planning, architecture, construction and after-sales support services, including property sales and leasing. Talk to us about getting into the luxury property market today.